Basel I is the first Basel Accord. It arose from deliberations by central bankers from major countries during the late s and s. It is also known as the Basel Accord, and was enforced by law in the Group of Ten G countries in The Committee was formed in response to the messy liquidation of Cologne -based Herstatt Bank in On 26 June a number of banks had released Deutschmarks the German currency to the Herstatt Bank in exchange for dollar payments deliverable in New York City.
Due to differences in the time zones , there was a lag in the dollar payment to the counterparty banks; during this lag period, before the dollar payments could be effected in New York, the Herstatt Bank was liquidated by German regulators. Basel I, that is, the Basel Accord, is primarily focused on credit risk and appropriate risk-weighting of assets.
Banks are also required to report off-balance-sheet items such as letters of credit, unused commitments, and derivatives. These all factor into the risk weighted assets, which are reported to regulators. Over other countries also adopted, at least in name, the principles prescribed under Basel I.
The efficacy with which the principles are enforced varies, even within nations of the Group. Contents move to sidebar hide. Article Talk. Read Edit View history. Tools Tools. Download as PDF Printable version. In other projects. Wikidata item. Background [ edit ]. Main framework [ edit ]. Criticism [ edit ]. See also [ edit ].
References [ edit ]. Review of International Political Economy. ISSN S2CID Further reading [ edit ]. External links [ edit ]. Categories : in Switzerland Financial regulation Bank regulation in economic history.
